Blog Archives

The Key Opinion Leader (KOL) market in China is massive – not only in terms of revenue, but also the tremendous number of influencers available for brands home and abroad. To help companies better plan their digital KOL strategy, AdMaster and Weboyi.com released the 2017 China KOL report this month. Here’s what you need to know.First of all, when it comes to social media marketing, KOL is the main focus for most of the brands, for 63% of them to be exact. Setting up and operating a WeChat account is also important (49%). Brands also express their interests in Social CRM and live-streaming. Surprisingly, Weibo is losing its glory: only 22% of the respondents show interest.

As KOL marketing is gaining more and more attention, the cost of running campaigns increases exponentially. On Weibo, the price of influencer marketing in Q4 2016 increased over 7 times compared to Q1. On WeChat, the price of hiring KOLs in the cosmetics industry grew the fastest: more than 300% increase throughout last year! On both platforms, the price for the baby care industry increased the least.

Of course the high effectiveness of KOL marketing in China boosted the price. Nonetheless, it’s estimated that 69% of the statistics has been ‘marked-up’. Shuijun(水军), or unqualified followers, are hired by some influencers to fake up the number of views, likes or reposts of a social media post.

Facing the challenges, how should brand choose the most suitable KOL for them? The report offered us a selection funnel:

Step 1: Find out a few topics that your target audience would mostly be interested in.
Step 2: Search these topics on social platforms.
Step 3: Check out the users who are posting about these topics. You can filter by location, gender…
Step 4: List out which KOLs are these users following in common.
Step 5: Choose from the list of KOLs according to your product, budget and more.

In addition, digital KOL strategy differ when it comes to different industries. For example:

Cosmetics companies tend to invest the most in KOL marketing. Many of them are working with KOLs with over 500K followers.
Automobile and baby care tends to work with KOLs on Weibo.
Food providers often adopt a ‘cross-over’ strategy by working with KOLs from fashion, lifestyle, entertainment and comedy etc.

In the next few years, KOL will still be one of the most effective digital marketing channels in China. At the same time, it’s also evolving new social trends:

The new era of ‘social video’. As Apps for live-streaming and short video becomes popular in China, social video campaigns will serve both branding and conversion purposes.

Influencers on specialty marketplaces. Red (小红书), one of the most trending ecommerce platform in China, is working with KOLs to write about and recommend fashion products. This strategy has tremendously boosted user interaction.
Vertical platforms will be the next battlefield for brands. From 2015 to 2016, the numbers of KOL ads on Weibo and Wechat has decreased by 65%; while on vertical platforms (e.g. live-streaming), the number grew by more than a half.
KOL marketing for sales. Before, brands collaborate with KOLs mainly for branding purposes. Nowadays, more and more platforms are enabling users to not only view posts, but also purchase directly. More and more brands now are using influencers for sales generation.

Digital KOL marketing is still a relatively new marketing channel in China. For international companies, it’s particularly important to do your market/consumer research to find the right influencers and the right channels.

AgencyChina can help you narrow down your best digital marketing strategy and help execute great KOL campaigns! Get in touch today!

If you are still only thinking about Tmall & JD when it comes to China cross-border e-commerce platforms, then you definitely need to catch up. In recent years, many western players, especially fashion retailer, have tapped into the Chinese e-commerce market. These platforms offer custom clearance and free shipping services, so that cross-border purchase is almost as convenient as buying from local marketplaces. Meanwhile, local internet companies such as NetEase also established its own cross-border platform, directly competing with Tmall and JD in global business.

Types of cross-border e-commerce in China

Chinese consumers almost exclusively shop on online marketplaces, instead of stand-alone sites from brands. In general, there are 5 different types of 3rd-party platforms in China:

Online malls

In online malls, customers are able to directly purchase items from independent merchants. The most famous examples are Tmall Global and JD Worldwide.

Hypermarkets

Hypermarkets adopt a B2B2C model, which is fundamentally different from online malls. Such markets (e.g. Jumei and Koala) purchase from foreign brands and sell in on the platform. Consequently, hypermarkets charge a markup from wholesale price to retail price.

Specialty marketplaces

Such marketplaces also buy goods directly from overseas suppliers. However, specialty markets only focus on a specific product category (e.g. fashion; baby care), target audience (e.g. young female; new mothers) or geographic location (e.g. Korean; Japan). Although traffic is lower, specialty marketplaces usually generate more qualified prospects and thus higher conversion rate.

Flash sales websites

Flash sales sites offer high discounts for brands that just entered China, or excessive inventories from high-end brands. Such websites can be an effective tool for foreign brands to test their product in the Chinese market, before investing substantially on ecommerce activities. Meanwhile in general, flash sales can be used as a digital marketing tool to boost brand exposure in China.

WeChat stores

Such stores operates on WeChat – the #1 killer messaging App in China. Verified merchants can open an in-app store and sell to millions of Wechat users. Wechat also offers its own payment system for customers and merchants to pay and collect money.

How should I choose the most suitable platform?

As with many other digital marketing tools in China, no single platform fits it all. Hence, it’s always beneficial to adopt a multi-channel approach. In general, there’re 2 ways to enter China through cross-border ecommerce platforms:

1. Fast growth strategy (high cost, fast growth)

Under such model, companies usually start by establishing a flagship store on online malls/hypermarkets. By doing so, brands are able to quickly boost traffic & brand visibility. Also, they are able to gather first-hand consumer feedback and optimize future plans. Nonetheless, setup cost and regulatory barriers are high, and brands need to invest tremendously to fight against competition within each online mall/marketplace.

2. Organic growth strategy (low cost, slow growth)

Smaller brands often follows the path of Wechat store (market test) → Specialty market/hypermarket (exposure) → online mall (stable business). Under this model brands face less financial risks, and are able to use social marketing to target their audience. However, initial sales volume will be low and heavy investment on branding is needed to attract prospects.

As cross-border ecommerce is booming in China, it’s critical for foreign companies to evaluate your goal and budget etc. before settling down for any platform.

(Resources from ‘China Cross-border E-commerce Guidebook‘ published by the Consulate General of the Netherlands in Shanghai)

2017 China KOL report: what you need to know

China cross-border e-commerce platforms & entry strategy